Speech by Minister of Small Business Development , Ms Lindiwe Zulu, on the occassion of the Global Enterpreneurship Week Launch, (IDC, Sandton)
Programme Director,
Statistician General of the Republic of South Africa, Mr Pali Lehohla
President of the Global Entrepreneurship Network: Mr Jonathan Ortman
Senior Government Officials
Representatives of the Business Community
Members of the Civil Society
Members of the Press
Distinguished guests
Ladies and gentlemen
I am delighted to be with you this morning, and pleased to be part of this gathering. I’m also honoured and excited to be hosting the 2016 Global Entrepreneurship Week launch. It is indeed a memorable event. Today signifies a major step that gives all of us an assurance that this country is really determined in intensifying efforts to build and sustain its entrepreneurial capacity.
South Africa is the first to launch this GEW today, the rest of the world will follow in the week to come. We are glad that the President of the GEN Network Mr Jonathan Ortman has also chosen to be with us here.
We will also be joined by the Deputy President, H.E Dr Cyril Ramaphosa, and Premier of Gauteng, Mr David Makhura later today. We are also joined by a high calibre of South Africa’s Executives and Entrepreneurs.
We are joined by such high profile leadership because of the significance of prioritizing entrepreneurship in our country, particularly in light of the Statistician General’s insightful and haunting presentation this morning. His presentation told us that the majority of our population is still outside the economic mainstream and it will only get inside on their own initiatives and efforts which is at the heart of entrepreneurship. There has never been a more critical time to encourage the spirit of entrepreneurship to benefit society and the economy.
We are committed as a department to collaborate with various organisations to ensure that entrepreneurship remains on the centre our stakeholder engagement in South Africa and the continent.
As you may all be aware, this gathering is a precursor, in preparation of the 2017 Global Entrepreneurship Congress, an event expected to attract international delegates from 160 countries and highlights the importance of global collaboration and integration. Next year March South Africa will for the first time on the African continent host the GEC and we look forward to hosting all of you together with the many thousands from the this partnership. This will be the 2010 of Entrepreneurship and it’s up to all of us here today to ensure that it is a success and benefits African businesses and above all ignite this flame of entrepreneurship and interprets to a better life at the base of the pyramid.
This event presents a great opportunity to have a dialogue between the world of business, academia, NGOs, research organisations and government. It is indeed set up as a platform where different players can meet and learn from each other and harness entrepreneurial abilities in a more practical and meaningful way.
Addressing unemployment levels in the country remains a key national agenda. As the Statistician General reminds us, high unemployment levels remain the biggest challenge to inclusive growth in South Africa. Unemployment now presents an existential threat to economic growth and development. Unemployment is now breeding further unemployment leading to a tipping point if we do not intervene deliberately and drastically.
As government aims to decrease the unemployment rate to 15% by 2020, increasing the efficiency of small business and entrepreneurship support is amongst various initiatives to boost job creation. Accordingly, entrepreneurship and SMMEs are increasingly seen as playing an important role in addressing socio-economic ills.
The 2015 World Bank Group’s data shows that while South Africa is a better place to start a business than most other African nations, there is much room for improvement in order to compete with other economies.
The 2015 Global Entrepreneurship Monitor shows that South Africa’s Total Entrepreneurial Activity (TEA) rate has reclaimed some ground since 2014 (from 7% to 9.2%), however the rates for all phases of early-stage entrepreneurial activity remain disturbingly low. The average TEA for the efficiency driven economies is 15% which is 1.6 times higher than South Africa’s TEA rate. What is more worrying is that South Africa’s TEA rate is only half the regional average for Africa. Around two-thirds of entrepreneurs in South Africa were opportunity-driven as recorded in the 2015 GEM report.
Notwithstanding some of the negative trends depicted, a dramatic improvement has been highlighted by the release of the 2016 Global Entrepreneurship Index indicating that South Africa is the best performing country in Sub-Saharan Africa in terms of quality entrepreneurship. However, as a country we are operating at 38,5% of our entrepreneurship capacity compared to the top country USA operating at 86.2% of its capacity. Our weakest area remains in start-up skills relating to human capital. Despite the disappointing trends, South Africa’s ratio of TEA to business discontinuance is fairly encouraging as compared to the previous years.
You would probably agree with me that there is therefore a compelling argument for empowering all citizens, pushing against the frontiers of poverty, creating inclusive societies and dynamic economies that will give the poor the opportunity to accumulate the means and necessary competencies to control their own destinies.
I must admit though, that much has happened in the entrepreneurial and small business sector space. We have continuously witnessed the strength in the ownership that South Africa demonstrates in shaping its development agenda. The country has demonstrated its ability to nurture its own vision and aspirations for growth and development. Another major achievement that government has delivered is the 30% target of appropriate categories of state procurement allotted for purchasing from SMMEs, co-operatives as well as township and rural enterprises, this is major milestone indeed!
I have outlined a number of concrete actions that this country has undertaken to reach higher levels of growth and accelerate the pace and spirit of entrepreneurship.
Let me also point out that SMMEs, entrepreneurs and start-ups are key priorities for us for several reasons. It is clear that South Africa will not achieve sustainable growth without a vibrant, competitive and innovative private sector. But we also must acknowledge how integrated our growth trajectory is with that of the international community and we ought to facilitate the growth of our small enterprises to penetrate international market opportunities.
This premise reflects an affirmation of the critical role that entrepreneurs especially young people can and should continue to play in shaping the future of our country. Ironically, shortages of entrepreneurial skills have negatively impacted the exploration and effectiveness of potential young entrepreneurs as well as the rate of youth start-ups. As a result, we do note that consequences of youth underutilisation extend beyond economic well-being. Social exclusion and idleness is an important negative consequence of youth unemployment. The young people miss out on critical life-skill building experiences such as applying knowledge, developing a sense of own abilities as well as contributing meaningfully to the society.
So, I believe that young entrepreneurs should assert themselves and take advantage of opportunities presented to them. In doing this, you need to understand that entrepreneurship process itself is the course through which you need to take appropriate action, pursue an opportunity to produce something distinctive and to add value in the economy.
Let me pause, take time and ask people to look around and really inquire if they ever wondered about the incredible things and opportunities that entrepreneurs and businesses have given the world. Has anyone ever thought of the marvelous creations and inventions and asked, could any of that have been possible without the existence of entrepreneurs?
An entrepreneur is an explorer who travels into uncharted territory and open up new routes along which all of us will be travelling. Indeed, entrepreneurs are the heroes of our world. Despite the risks, the hard work, challenges, hostility from society, resentment from any opposing views and any form of hindrance they may be facing, they press on and keep on creating, they keep on producing and keep on trading against all odds.
Indeed, we need entrepreneurs as heroes, because they say something about what our values are, what is good, what is great, what is majestic, what we should all strive for, and paving the path for the rest of us to follow.
I must firmly indicate that South Africa need such individuals which are critical in delivering the millions of jobs so much needed and making significant effort towards decreasing unemployment, poverty, and inequality. Our people must seize the economic opportunities presented by our democracy and freedom to build and grow businesses.
Think of an entrepreneur as the champion of our world, to dream, to innovate, and to create. I think we need to appreciate the ingenuity, the hard work, and we, the society, should be appreciative to the entrepreneurs for what they contribute in our economy.
In conclusion, let me also reiterate the contention that this platform remains particularly relevant and necessary to advance the development of our country’s entrepreneurial landscape so as to better serve the pursuit for transformation.
It further validates the need to deliberate on the opportunities to be presented and to map out how South Africa can better shape its future through partnership.
I would like to thank the great effort that went into organising this event and all our partners.
I thank you.
